84 Lumber Company v. F.H. Paschen, S.N. Nielsen & Associates, LLC et al, No. 2:2012cv01748 - Document 206 (E.D. La. 2017)
Court Description: ORDER AND REASONS - the Court GRANTS Fidelity's motion for partial summary judgment and DISMISSES Paschen's claims against Fidelity that arise out of the breach of Paschen's subcontract with J & A. The Court also GRANTS Fidelity's motion for judgment on the pleadings and DISMISSES Paschen's claim against Fidelity arising out of 84 Lumber's breach of its subcontract with J & A.. Signed by Judge Sarah S. Vance on 2/3/17. (jjs)
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84 Lumber Company v. F.H. Paschen, S.N. Nielsen & Associates, LLC et al Doc. 206 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA 84 LUMBER COMPANY VERSUS CIVIL ACTION NO. 12-1748 F.H. PASCHEN, S.N. NIELSEN & ASSOCIATES, LLC, ET AL. SECTION “R” (5) ORD ER AN D REASON S Before the Court is Third-Party Defendant Fidelity and Deposit Com pany of Maryland’s (Fidelity) m otion for partial sum m ary judgm ent. 1 Also before the Court is Fidelity’s m otion for partial judgm ent on the pleadings. 2 For the following reasons, the Court GRANTS both m otions. I. BACKGROU N D This case arises out of two school construction projects in New Orleans, Louisiana, the Mildred Osborne Project and the South Plaquem ines Project. 3 Third-party plaintiff F.H. Paschen, S.N. Nielsen & Associates, LLC (Paschen) was the general contractor on both projects. Paschen subcontracted part of the projects to defendant J & A Construction Managem ent Resources 1 2 3 R. Doc. 185. R. Doc. 186. R. Doc. 70 . Dockets.Justia.com Com pany, Inc. (J & A), and J & A subcontracted its obligations to plaintiff 84 Lum ber Com pany (the sub-subcontracts). Fidelity issued two perform ance bonds for each of the sub-subcontracts between J & A and 84 Lum ber. 4 The bonds, dated October 4, 20 10 , and October 22, 20 10 , guaranteed 84 Lum ber’s performance under the sub-subcontracts with J & A. 5 Both perform ance bonds clearly on their face identify 84 Lumber as the Principal, J & A as the Obligee, and Fidelity as the Surety. 6 On October 7, 20 10 , and October 22, 20 10 , respectively, Fidelity added riders to both perform ance bonds, which am ended the bonds by nam ing Paschen as a dual obligee. 7 Both riders stated that “[e]xcept as herein m odified, said Performance Bonds shall be and rem ain in full force and effect.”8 On J uly 5, 20 12, 84 Lumber sued Paschen, Fidelity, and the other surety com panies, alleging that it was not paid in full for work performed under its Master Service Agreem ent with J & A. 9 It also alleged that it was entitled to paym ent for m aterials and for additional work perform ed outside of the Master Service Agreement. Paschen answered 84 Lum ber’s com plaint 4 R. Doc. 185-9 at 1; R. Doc. 185-10 at 1. Continental Casualty Com pany and Safeco Insurance Company of Am erica were also sureties. 5 Id. 6 Id. 7 R. Doc. 185-9 at 4; R. Doc. 185-10 at 2. 8 Id. 9 R. Doc. 1. 2 and added J & A as a third-party defendant. 10 Paschen’s answer also asserted counterclaim s against Fidelity, alleging that the breach of contract by 84 Lum ber and J & A m ade Fidelity liable to Paschen for those dam ages. 11 The case was stayed for nearly three years while the parties attempted to resolve their claim s through arbitration. 12 On J anuary 13, 20 16, this case was reassigned from J udge Berrigan’s cham bers to this Court for all further proceedings. 13 On May 5, 20 16, the Court granted 84 Lum ber’s m otion to lift the stay in this case and to dism iss J & A’s claim s against 84 Lumber for failure to prosecute. 14 With the case reopened, Fidelity now m oves for sum m ary judgm ent and judgment on the pleadings on Paschen’s claim s. Paschen filed an opposition to both m otions, 15 and Fidelity filed replies for both. 16 10 11 12 R. Doc. 25. Id. at 6-7 ¶¶ 31-32. For a history of the failed arbitration process, see R. Doc. 151 at 1-6. 13 R. Doc. 144. R. Doc. 151. J & A’s claim s were also dism issed against Maggie’s Managem ent, LLC. 15 R. Doc. 192; R. Doc. 193. 16 R. Doc. 197; R. Doc. 199. 3 14 II. LEGAL STAN D ARD A. Su m m ary Ju d gm e n t Sum m ary judgment is warranted when “the m ovant shows that there is no genuine dispute as to any m aterial fact and the m ovant is entitled to judgm ent as a m atter of law.” Fed. R. Civ. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Little v. Liquid Air Corp., 37 F.3d 10 69, 10 75 (5th Cir. 1994). When assessing whether a dispute as to any m aterial fact exists, the Court considers “all of the evidence in the record but refrains from m aking credibility determ inations or weighing the evidence.” Delta & Pine Land Co. v. N ationw ide Agribusiness Ins. Co., 530 F.3d 395, 398 (5th Cir. 20 0 8). All reasonable inferences are drawn in favor of the nonm oving party, but “unsupported allegations or affidavits setting forth ‘ultim ate or conclusory facts and conclusions of law’ are insufficient to either support or defeat a m otion for sum m ary judgm ent.” Galindo v. Precision Am . Corp., 754 F.2d 1212, 1216 (5th Cir. 1985) (quoting Wright & Miller, Fed. Prac. and Proc. Civ.2d § 2738 (1983)). If the dispositive issue is one on which the m oving party will bear the burden of proof at trial, the m oving party “m ust come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial.” Int’l Shortstop, Inc. v. Rally ’s, Inc., 939 F.2d 1257, 4 1264-65 (5th Cir. 1991) (internal quotation om itted). The nonm oving party can then defeat the m otion by either countering with sufficient evidence of its own, or “showing that the m oving party’s evidence is so sheer that it may not persuade the reasonable fact-finder to return a verdict in favor of the m oving party.” Id. at 1265. If the dispositive issue is one on which the nonm oving party will bear the burden of proof at trial, the m oving party m ay satisfy its burden by m erely pointing out that the evidence in the record is insufficient with respect to an essential elem ent of the nonm oving party’s claim . See Celotex, 477 U.S. at 325. The burden then shifts to the nonm oving party, who m ust, by subm itting or referring to evidence, set out specific facts showing that a genuine issue exists. See id. at 324. The nonm ovant m ay not rest upon the pleadings, but m ust identify specific facts that establish a genuine issue for trial. Id. at 325; see also Little, 37 F.3d at 10 75 (“Rule 56 ‘m andates the entry of sum m ary judgment, after adequate tim e for discovery and upon m otion, against a party who fails to m ake a showing sufficient to establish the existence of an elem ent essential to that party’s case, and on which that party will bear the burden of proof at trial.’”) (quoting Celotex, 477 U.S. at 332). 5 B. Ju d gm e n t o n th e Ple ad in gs A m otion for judgm ent on the pleadings under Federal Rule of Civil Procedure 12(c) is appropriate if the m atter can be adjudicated by deciding questions of law rather than factual disputes. Brittan Com m c’ns Int’l Corp. v. Sw . Bell Tel. Co., 313 F.3d 899, 90 4 (5th Cir. 20 0 2). It is subject to the same standard as a m otion to dism iss under Rule 12(b)(6). Doe v. My Space, Inc., 528 F.3d 413, 418 (5th Cir. 20 0 8). To survive a Rule 12(b)(6) m otion to dism iss, the plaintiff m ust plead enough facts “to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Tw om bly , 550 U.S. 544, 570 (20 0 7). A claim is facially plausible when the plaintiff pleads facts that allow the court to “draw the reasonable inference that the defendant is liable for the m isconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (20 0 9). A court m ust accept all well-pleaded facts as true and m ust draw all reasonable inferences in favor of the plaintiff. Lorm and v. U.S. Unw ired, Inc., 565 F.3d 228, 239 (5th Cir. 20 0 9). But the Court is not bound to accept as true legal conclusions couched as factual allegations. Iqbal, 556 U.S. at 678. A legally sufficient com plaint m ust establish m ore than a “sheer possibility” that plaintiff’s claim is true. Id. It need not contain detailed factual allegations, but it m ust go beyond labels, legal conclusions, or form ulaic recitations of the elements of a cause of action. Id. In other words, 6 the face of the com plaint m ust contain enough factual m atter to raise a reasonable expectation that discovery will reveal evidence of each element of the plaintiff’s claim . Lorm and, 565 F.3d at 257. If there are insufficient factual allegations to raise a right to relief above the speculative level, or if it is apparent from the face of the com plaint that there is an insuperable bar to relief, the claim m ust be dism issed. Tw om bly , 550 U.S. at 555. III. D ISCU SSION Paschen asserts two claim s against Fidelity, both arising out of Fidelity’s perform ance bonds guaranteeing 84 Lum ber’s performance in the sub-subcontracts between J & A and 84 Lum ber. The first claim seeks dam ages for the failure of both J & A and 84 Lum ber to perform under the “J & A Subcontracts.” The second claim specifically seeks to recover damages that Paschen is allegedly entitled to recover because of its status as a dual obligee on the perform ance bonds issued by Fidelity. 17 Fidelity m oves for sum m ary judgm ent on Paschen’s first claim and judgment on the pleadings on Paschen’s second claim . Each will be addressed in turn. 17 Id. at 7 ¶ 32. 7 A. Su m m ary Ju d gm e n t Paschen’s first claim against Fidelity asserts damages arising out of the breach by 84 Lumber and J &A of the “J & A Subcontracts,” which Paschen itself defines as the contract between Paschen and J & A. 18 Fidelity argues it is entitled to sum mary judgment as a m atter of law on this claim because it cannot be held liable for 84 Lumber’s breach of the “J & A Subcontracts” as 84 Lum ber is not a party to that subcontract, nor did Fidelity bond that subcontract. 19 Further, Fidelity argues that it cannot be held liable for J & A’s breach of any contract because Fidelity guaranteed only 84 Lum ber’s, not J & A’s, performance. 20 In response, Paschen contends that one of the perform ance bonds is am biguous as to which contract the bond covers, and therefore the intention of the parties m ust determ ine the scope of the perform ance bonds. 21 1. Scope of the Perform ance Bonds Fidelity asserts, and Paschen does not dispute, that the performance bonds at issue are conventional bonds, governed by Louisiana’s general 18 Id. at 1 ¶ 18. R. Doc. 185-1 at 2. 20 Id. 21 R. Doc. 192 at 1-2. Paschen also argues that sum m ary judgm ent is inappropriate as to Paschen’s claim s arising out of its status as a dual obligee. This argum ent will be discussed in the section addressing Fidelity’s judgm ent on the pleadings. 8 19 suretyship law. See T & R Dragline Serv., Inc. v. CN A Ins. Co., 796 F.2d 133, 134-35 (5th Cir. 1986) (citing Elliot Construction Co., Inc. v. United States Fidelity & Guaranty Co., 424 So. 2d 120 2, 120 4 (La. App. 1 Cir. 1982)). Under Louisiana law, “suretyship is an accessory contract by which a person binds himself to a creditor to fulfill the obligation of another upon the failure of the latter to do so.” La. Civ. Code art. 30 35. Suretyship contracts m ust be express and in writing, id. art. 30 38, and the suretyship “m ay be qualified, conditioned, or lim ited in any lawful m anner,” id. art. 30 40 . Suretyship will not be presumed, and the scope of the suretyship will be lim ited to the express term s of the contract. See First N at. Bank of Crow ley v. Green Garden Processing Co., Inc., 387 So. 2d 10 70 , 10 72-73 (La. 1980 ) (recognizing that suretyship contracts can be lim ited to their express terms); Shelter Prod., Inc. v. Am . Constr. Hotel Corp., 655 F. App’x 10 12, 10 15 n.4 (5th Cir. 20 16) (per curiam ). Here, the suretyship was created by the perform ance bonds issued by Fidelity. Both bonds state: 9 KNOW ALL MEN BY THESE PRESENTS: That 84 Lum ber, . . . as Principal, . . . , and Fidelity and Deposit Com pany of Maryland . . . as Surety, . . . are held and firm ly bound unto J & A Construction Managem ent Resources Co. Inc. . . . as Obligee, . . . , in the am ount of ($ 1,40 0 ,0 0 0 .0 0 / $ 5,879,950 .0 0 ), for the paym ent of which Principal and Surety bind themselves, their heirs, executors, adm inistrators, successors and assigns, jointly and severally, firm ly by these presents. WHEREAS, Principal has by written agreement dated (10 / 0 1/ 20 10 / 10 / 20 / 20 10 ) entered into a subcontract w ith Obligee for (Mildred Osborn School/ South Plaquem ines High School) in accordance with drawings and specifications prepared by (Fauntelory & Latham Architects/ Verges Rome Architects) which subcontract is by reference m ade a part hereof, and is hereinafter referred to as the subcontract. NOW, THEREFORE, THE CONDITION OF THIS OBLIGATION IS SUCH, That, if Principal shall promptly and faithfully perform said subcontract, then this obligation shall be null and void; otherwise it shall rem ain in full force and effect. 22 A plain reading of both perform ance bonds reveals that Fidelity guaranteed 84 Lum ber’s perform ance under both sub-subcontracts between J & A and 84 Lum ber, and only 84 Lumber’s perform ance. Neither perform ance bond m akes a reference to any contract to which 84 Lumber is not a party, or to any other subcontract for that m atter. 22 R. Doc. 185-9 at 1 (em phasis added); R. Doc. 185-10 at 1 (em phasis added). The parenthetical entries refer to the Mildred Osborne contract and the South Plaquem ines contract, respectively. 10 Despite the clear and unam biguous language of the perform ance bonds, Paschen argues that the scope of the bonded obligations under the bonds is ambiguous because both bonds “provide only a general description of the source of the bonded obligations,” and because one of the bonds lists an incorrect date for the incorporated subcontract. 23 Paschen argues that the Court m ust look to extrinsic evidence to resolve the ambiguities. Neither of Paschen’s arguments on ambiguity is persuasive. Surety contracts are governed by the same rules of interpretation as contracts in general. Ferrell v. S. Cent. Bell Tel. Co., 40 3 So. 2d 698, 70 0 (La. 1981). In Louisiana, the issue of the am biguity, vel non, of a contract is a legal question. Doré Energy Corp. v. Prospective Inv. & Trading Co., Ltd., 570 F.3d 219, 225 (5th Cir. 20 0 9). If the contract is not am biguous, then interpreting it is also a legal issue for the court. Id. A contract is considered am biguous on the issue of intent when it lacks a provision bearing on that issue, the term s of a written contract are susceptible to m ore than one interpretation, there is uncertainty or am biguity as to its provisions, or the intent of the parties cannot be ascertained from the language em ployed. Cam pbell v. Melton, 817 So. 2d 69, 75 (La. 20 0 2). 23 R. Doc. 193. 11 First, that the bonds generally describe the source of the bonded obligation does not suggest am biguity, and Paschen cites no caselaw im plying that it does or that there is a specificity requirem ent for conventional bonds. But even if there were, the bonds clearly identify 84 Lum ber as the Principal and J & A as the Obligee, clearly identify the contract between the Principal (84 Lumber) and the Obligee (J & A) as the bonded contract, and clearly guarantee the perform ance of the Principal (84 Lum ber). None of that is am biguous, and the scope of the obligation is clearly lim ited to 84 Lum ber’s perform ance of its sub-subcontract with J & A. Second, Paschen attem pts to create ambiguity by pointing out that the perform ance bond for the South Plaquem ines project refers to and incorporates a subcontract between J & A and 84 Lumber dated October 20 , 20 10 . 24 Paschen notes that there is no contract in the record dated October 20 , 20 10 , and the contract attached to Fidelity’s m otion for sum m ary judgm ent purporting to be the sub-subcontract between J & A and 84 Lum ber is actually dated December 3, 20 10 . 25 But that the date referred to 24 R. Doc. 185-10 at 1. Because the date on the Mildred Osborne perform ance bond m atches the date on the Mildred Osborn sub-subcontract between J & A and 84 Lum ber, Paschen does not argue that the Mildred Osborne perform ance bond is am biguous because of an erroneous date. 25 R. Doc. 185-8. 12 in the perform ance bond m ay be a typographical error does not create am biguity as which contract is bonded or as to whose perform ance is guaranteed by Fidelity’s bond, especially since the bond clearly identifies the parties to the contract and that the bond guarantees the perform ance of the Principal 84 Lum ber. In Louisiana, each provision in a contract m ust be interpreted in light of the entire contract as a whole. Clovelly Oil Co., LLC v. Midstates Petroleum Co., LLC, 112 So. 3d 187, 192 (La. 20 13). And as a whole, the perform ance bond is not am biguous as to which contract is bonded and whose perform ance is guaranteed. Thus, because the bond is clear and unambiguous, the Court will not consider parol evidence to vary the terms of the perform ance bonds. See La. Civ. Code art. 1848; McCarroll v. McCarroll, 70 1 So. 2d 1280 , 1286 (La. 1997) (noting that parol evidence is inadm issible to vary the terms of an unam biguous contract). Further, even if the Court agreed that the erroneous date m eant that the perform ance bond was am biguous to the point where parol evidence could be considered, the evidence in the record does not show a genuine issue of m aterial fact as to which contract is bonded or whose perform ance is guaranteed by the perform ance bond. The perform ance bond clearly refers to an October 20 , 20 10 contract between J & A and 84 Lum ber for the South 13 Plaquem ines High School. 26 The bond also clearly lim its its obligations to 84 Lum ber’s obligations under the subcontract between 84 Lum ber and J & A. 27 Fidelity has subm itted a Decem ber 3, 20 10 contract between J & A and 84 Lumber for the South Plaquem ines High School, establishing 84 Lum ber’s obligations. 28 Paschen has subm itted no evidence whatsoever indicating that the perform ance bonds bonded a contract other than the one between J & A and 84 Lum ber or that the bonds guaranteed the perform ance of any party besides 84 Lumber. Therefore, even if the Court found there is an erroneous date on the South Plaquem ines perform ance bond, Paschen has failed to create a genuine issue of m aterial fact as to the scope of the guarantee of the perform ance bond. See Archie v. Acceptance Indem . Ins. Co., 50 7 F. App’x 451, 454 (5th Cir. 20 13) (per curiam ) (“[A]ny ambiguity introduced into the policy by the typographical error in the second part of the provision does not create a genuine issue of m aterial fact as to whether the insurance policy exclusion applied.”). Because the Court finds that Fidelity’s obligations under the bonds are clear and unam biguous, Fidelity cannot be held liable for a breach of the subcontract between Paschen and J & A, nor can Fidelity be held liable for 26 27 28 R. Doc. 185-10 at 1. Id. R. Doc. 185-8. 14 any breach com m itted by J & A. Therefore, Fidelity is entitled to sum m ary judgm ent as a m atter of law as to Paschen’s claim s arising out of J & A’s breach of its subcontract with Paschen. 29 B. Ju d gm e n t o n th e Ple ad in gs Paschen’s second claim against Fidelity is unrelated to any breach by J & A and to the subcontract between Paschen and J & A. Instead, Paschen’s second claim alleges that Paschen is entitled, as a dual obligee, to recover from Fidelity dam ages it sustained from 84 Lum ber’s breach. 30 Fidelity m oves for judgment on the pleadings on this claim, noting that the perform ance bonds clearly set out certain conditions precedent to Fidelity’s obligations. 31 Fidelity argues that Paschen’s third-party com plaint does not adequately plead the satisfaction of the conditions precedent as required under Rule 9(c) of the Federal Rules of Civil Procedure and therefore should be dism issed. 29 Fidelity’s m otion for sum m ary judgm ent also argues that Paschen’s status as a dual obligee does not alter the scope of Fidelity’s bonded obligations. R. Doc. 185-1 at 6. Because Paschen’s response does not argue that Paschen’s status as a dual obligee alters the scope of Fidelity’s obligations, the Court need not address it. 30 R. Doc. 25 at 7 ¶ 32. 31 R. Doc. 186-1 at 6. 15 In support, Fidelity points to the text of the performance bonds and the riders that added Paschen as a dual obligee. The perform ance bonds both state: W henever Principal shall be, and be declared by Obligee to be in default under the subcontract, the Obligee having perform ed Obligee’s obligations thereunder: (1) Surety m ay prom ptly remedy the default subject to the provisions of paragraph 3 herein, or; (2) Obligee after reasonable notice to Surety m ay, or Surety upon demand of Obligee m ay arrange for the perform ance of Principal’s obligations under the subcontract subject to the provisions of paragraph 3 herein; (3) The balance of the subcontract price . . . shall be credited against the reasonable cost of com pleting perform ance of the subcontract. If com pleted by the Obligee, and the reasonable cost exceeds the balance of the subcontract price, the Surety shall pay to the Obligee such excess, but in no event shall the aggregate liability of the Surety exceed the am ount of this bond. 32 Additionally, both riders to the perform ance bonds state that “the nam e of F.H. Paschen SN Nielsen & Associates LLC shall be added to said Bond as a Named obligee” and that “[e]xcept as herein m odified, said Perform ance Bond shall be and rem ain in full force and effect.”33 In response, Paschen argues first that Fidelity’s m otion im properly relies on m atters outside the pleadings and therefore m ust be considered as 32 R. Doc. 185-9 at 1 (em phasis added); R. Doc. 185-10 at 1 (em phasis added). 33 R. Doc. 185-9 at 4; R. Doc. 185-10 at 2. 16 a m otion for sum mary judgment. 34 Further, Paschen argues that even if the Court does not convert the 12(c) motion into a m otion for sum m ary judgm ent, Paschen’s third-party complaint, liberally construed, satisfies the requirements of Rule 9(c). 35 Paschen’s argum ents will be addressed in turn. 1. Materials Bey ond the Pleadings Paschen does not specifically identify which docum ents Fidelity is relying on that were not attached to Paschen’s pleadings. But Fidelity does quote from the perform ance bonds and riders in its m otion, and these docum ents were attached to Fidelity’s m otion. Neither the perform ance bonds nor the riders were attached to Paschen’s third-party com plaint. In considering a m otion to dism iss for failure to state a claim , a court m ust typically lim it itself to the contents of the pleadings, including their attachm ents. Collins v. Morgan Stanley Dean W itter, 224 F.3d 496, 498 (5th Cir. 20 0 0 ); see also Great Plains Trust Co. v. Morgan Stanley Dean W itter & Co., 313 F.3d 30 5, 312-13 (5th Cir. 20 0 2) (discussing standard that governs the materials district court m ay properly consider in deciding a Rule 12(c) m otion). Federal Rule of Civil Procedure 12(d) establishes that “[i]f, on a m otion under Rule 12(b)(6) or 12(c), m atters outside the pleadings are 34 35 R. Doc. 193 at 1. Id. at 5-6. 17 presented to and not excluded by the court, the m otion m ust be treated as one for sum m ary judgm ent under Rule 56.” Fed. R. Civ. P. 12(d). Thus, while Paschen is correct that the Court cannot consider m atters outside the pleadings without converting Fidelity’s m otion into a m otion for sum m ary judgment, the docum ents relied on by Fidelity in this m otion are not outside the pleadings. The Fifth Circuit has repeatedly held that a court m ay properly consider documents attached to a m otion to dism iss if the docum ents are referred to in the com plaint and central to the plaintiff’s claim . See, e.g., Collins, 224 F.3d at 498-99; Causey v . Sew ell CadillacChevrolet, Inc., 394 F.3d 285, 288 (5th Cir. 20 0 4); Brand Coupon N etw ork, L.L.C. v. Catalina Mktg. Corp., 748 F.3d 631, 635 (5th Cir. 20 14). Paschen’s com plaint clearly refers to both the perform ance bonds and the riders that m ade Paschen a dual obligee. 36 Further, both the bonds and the riders are central to Paschen’s claim s, as Paschen seeks, as dual obligee, to recover dam ages from 84 Lum ber’s alleged failure to perform —a perform ance that Fidelity guaranteed. 37 Because the Court can consider the perform ance 36 R. Doc. 25 at 6 ¶ 31 (“Paschen required J & A to furnish Paschen with a paym ent and perform ance bond for each project. Thereafter, 84 Lum ber assisted J & A in com plying . . . by furnishing to J & A a bond issued by Fidelity . . . .”); id. (“And at the request of 84 Lum ber, [Fidelity] nam ed Paschen as a dual obligee on the bonds . . . .”). 37 Id. at 7 ¶ 32 (“Paschen is also entitled to recover from [Fidelity] pursuant to Paschen’s status as a dual obligee all that Paschen sustained 18 bonds and riders without converting Fidelity’s m otion into a m otion for sum m ary judgment, Paschen’s argument to the contrary is m eritless. 2. Conditions Precedent Under Rule 9(c) Fidelity contends, and Paschen does not dispute, that there are two conditions precedent to trigger Fidelity’s obligations and/ or liability under the perform ance bonds. The conditions are (1) that 84 Lum ber be in default of the bonded sub-subcontract between 84 Lum ber and J & A, and (2) that 84 Lumber be declared in default by one of the obligees. See L & A Contracting Co. v. So. Concrete Servs., Inc., 17 F.3d 10 6, 10 9, 10 9 n.6 (5th Cir. 1994) (interpreting identical language in perform ance bond to im pose same two conditions as above). Additionally, Paschen does not argue that the riders to the performance bond negated the conditions precedent or somehow excuse Paschen from com pliance. 38 Federal Rule of Civil Procedure 9(c) instructs plaintiffs that “[i]n pleading conditions precedent, it suffices to allege generally that all conditions precedent have occurred or been performed.” Fed. R. Civ. P. 9(c); from . . . 84 Lum ber’s non-performance and breach of the J & A Subcontracts under the dual obligee bond.”). 38 This argument would fail. See Travelers Cas. and Sur. Co. of Am . v. Univ. Facilities, Inc., No. 10 -1682, 20 11 WL 15580 0 9, at *4-5 (E.D. La. Apr. 25, 20 11) (holding that party made additional obligee to perform ance bond was bound by term s and conditions of bond). 19 see also Bettes v. Stonew all Ins. Co., 480 F.2d 92, 98 (5th Cir. 1973). Fidelity argues that Paschen has neither specifically nor generally alleged satisfaction of the conditions precedent. Paschen’s third-party com plaint m akes no general allegation that all conditions precedent have occurred or have been perform ed. A review of the complaint, however, reveals that Paschen pleaded the satisfaction of the first condition. Paschen’s com plaint alleges that “84 Lum ber’s perform ance was substandard, in violation of [84 Lum ber’s] Subcontracts with J & A.”39 Further, Paschen alleges that “as a result of those defaults by J & A and 84 Lum ber,” Paschen incurred dam ages. 40 Drawing all reasonable inferences in favor of Paschen, this allegation is sufficient to plead the first condition precedent that 84 Lum ber was in default. Nevertheless, the satisfaction of the second condition precedent, that Paschen declare 84 Lum ber in default, is not pleaded anywhere on the face of Paschen’s complaint. Nor can Paschen conflate its reference to substandard perform ance by 84 Lum ber with a declaration of default. This condition precedent requires that Paschen have taken action to declare 84 Lum ber in default, which is not alleged. 39 40 R. Doc. 25 at 2-3 ¶ 22. Id. at 3 ¶ 23 (em phasis added). 20 Because Paschen failed to m eet the requirem ents of Rule 9(c), its claim against Fidelity m ust be dism issed. See United States v. Trim ble, 86 F.R.D. 435, 437 (S.D. Fla. 1980 ) (dism issing claim because of failure to allege perform ance or occurrence of conditions precedent); Blount v. Kay , No. 14336, 20 16 WL 698146, at *5 (S.D. Miss. Feb. 19, 20 16) (sam e); cf. Probado Techs. Corp. v. Sm artnet, Inc., No. 0 9-349, 20 10 WL 2232831, at *8 (S.D. Tex. J une 2, 20 10 ) (denying m otion to dism iss because plaintiff’s general allegations that it performed its contractual obligations satisfied Rule 9(c)). 3. Conform Pleadings to Evidence Paschen argues that if the Court determ ines that it has failed to m eet the requirements of Rule 9(c), it should be afforded to opportunity to conform its pleadings to the evidence. 41 At the outset, the Court notes that Federal Rule of Civil Procedure 15(b)(2), which allows parties to am end their pleadings to conform them to the evidence is clearly inapplicable here, as Rule 15(b) covers am endments “during and after trial.” Fed. R. Civ. P. 15(b); see also id. (b)(2) (“When an issue not raised by the pleadings is tried by the parties’ express or im plied consent, . . . . A party m ay move—at any time, even after judgment—to am end the pleadings to conform them to evidence.”) (em phasis added). 41 Sim ilarly, Paschen’s reliance on N at G. Harrison R. Doc. 193 at 6. 21 Overseas Corp. v. Am . Tug Titan, 516 F. 2d 89, 95-96 (5th Cir.), m odified, 520 F.2d 110 4 (5th Cir. 1975), is unavailing because N at G. addressed, posttrial, a claim that not only the parties consented to trying, but was in fact tried. Furtherm ore, the liberal standards of Rule 15(a) no longer apply in this case. The scheduling order in this case set a deadline for amendm ents of pleadings, and the deadline of J uly 11, 20 16, has passed. 42 Instead, any request to am end Paschen’s pleadings would be governed by Rule 16(b)(4), which states “[a] schedule m ay be m odified only for good cause and with the judge’s consent.” See S & W Enters., L.L.C. v. SouthTrust Bank of Ala., N A, 315 F.3d 533, 535 (5th Cir. 20 0 3) (noting that Rule “16(b) governs am endment of pleadings once a scheduling order has been issued by the district court”). The good cause test has four factors, and the party seeking to m odify the scheduling order bears the burden to establish that the test has been met. Id. at 536. In the context of untim ely motions to am end pleadings, the Court considers “(1) the explanation for the failure to tim ely m ove for leave to am end; (2) the importance of the am endment; (3) potential prejudice in 42 R. Doc. 154 at 2. 22 allowing the am endm ent; and (4) the availability of a continuance to cure such prejudice.” Id. (internal m odifications and quotation m arks om itted). As Paschen incorrectly argued that Rule 15 governed, Paschen has m ade no attem pt to establish good cause. Therefore, Paschen gives no explanation whatsoever as to its failure to tim ely m ove for leave to am end. This weighs heavily against Paschen’s request, especially since Paschen filed its third-party complaint on February 5, 20 13, nearly four years ago. 43 And while the am endm ent is im portant because Paschen’s claim will fail without it, this im portance is insufficient to overcom e Paschen’s lack of explanation of its failure to tim ely seek leave to am end. Further, Paschen fails to dem onstrate that its am endm ent would not cause prejudice to Fidelity. See Squy res v. Heico Com panies, L.L.C., 782 F.3d 224, 238-39 (5th Cir. 20 15). Finally, the availability of a continuance to cure that prejudice is unlikely given that there are m ultiple parties to this lawsuit, the suit was originally filed in 20 12, and the trial date is less than three weeks away. Therefore, Paschen has failed to show good cause and the Court will not allow Paschen to am end its com plaint. 43 R. Doc. 25. 23 IV. CON CLU SION For the foregoing reasons, the Court GRANTS Fidelity’s m otion for partial sum m ary judgm ent and DISMISSES Paschen’s claim s against Fidelity that arise out of the breach of Paschen’s subcontract with J & A. The Court also GRANTS Fidelity’s m otion for judgm ent on the pleadings and DISMISSES Paschen’s claim against Fidelity arising out of 84 Lum ber’s breach of its subcontract with J & A. 3rd New Orleans, Louisiana, this _ _ _ _ _ day of February, 20 17. _____________________ SARAH S. VANCE UNITED STATES DISTRICT J UDGE 24
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